Last week, we got news that Apple (NASDAQ: AAPL) finally inked its much-anticipated deal with China Mobile (NYSE: CHL) to start offering iPhones on China Mobile’s massive network.#-ad_banner-#​ Although many Apple watchers had figured out that this was basically a done deal thanks to information discovered on a website owned by a China Mobile subsidiary, which had recently started taking preorders on the iPhone 5S and 5C, confirmation of the news was a welcome development. From a sheer size perspective, the China Mobile deal is fantastic for Apple, as it gives the stalwart personal… Read More

Last week, we got news that Apple (NASDAQ: AAPL) finally inked its much-anticipated deal with China Mobile (NYSE: CHL) to start offering iPhones on China Mobile’s massive network.#-ad_banner-#​ Although many Apple watchers had figured out that this was basically a done deal thanks to information discovered on a website owned by a China Mobile subsidiary, which had recently started taking preorders on the iPhone 5S and 5C, confirmation of the news was a welcome development. From a sheer size perspective, the China Mobile deal is fantastic for Apple, as it gives the stalwart personal technology company the opportunity to sell iPhones to China Mobile’s 740 million subscribers. To put that in context, consider that the number of China Mobile subscribers is more than double the entire U.S. population. If Apple can capture even a modest percentage of China Mobile users, we are talking about hundreds of millions of iPhones sold. AAPL shares rose only modestly in response to the news, but that shouldn’t be read as the market not liking this deal. As mentioned, the market had already expected the deal was going down, and that’s a big reason why AAPL… Read More

With the U.S. economy a half-decade removed from its last recession, there are relatively few bankruptcies these days. But they still occur.#-ad_banner-#​ Every few quarters another publicly traded company calls a timeout from its creditors, often leaving a worthless stock in its wake. These companies aren’t hard to find. You can simply focus on firms with lots of debt and deeply negative cash flow.  That backdrop led me to predict back in the summer of 2011 that AMR, the parent company of American Airlines, would eventually need to file for bankruptcy. Six months later, that’s exactly what AMR did. Read More

With the U.S. economy a half-decade removed from its last recession, there are relatively few bankruptcies these days. But they still occur.#-ad_banner-#​ Every few quarters another publicly traded company calls a timeout from its creditors, often leaving a worthless stock in its wake. These companies aren’t hard to find. You can simply focus on firms with lots of debt and deeply negative cash flow.  That backdrop led me to predict back in the summer of 2011 that AMR, the parent company of American Airlines, would eventually need to file for bankruptcy. Six months later, that’s exactly what AMR did. I rarely go out on a limb with such predictions. After all, many companies in financially dire straits can snag a lifeline, avoiding bankruptcy. Indeed, OCZ Technology (Nasdaq: OCZ) raised fresh capital a few times after I suggested a year ago that it was headed for bankruptcy. “OCZ has a very short window to stop the bleeding,” I predicted at the time. Fast-forward to last week, and OCZ finally relented and declared bankruptcy. Shorting these kinds of stocks can deliver 100% upside if there shares eventually become worthless, but such a strategy can also cause real pain. Nearly two years ago,… Read More

A strong gain after Friday’s jobs report failed to reverse four days of losses, and stocks were unable to deliver their ninth consecutive weekly gain. A Pullback Continues to be Likely After eight weeks of consecutive gains, SPDR S&P 500 ETF (NYSE: SPY) closed down 0.03% last week. The only up day was Friday, when SPY gained 1.12% after unemployment fell.#-ad_banner-#​ Traders’ reaction to the good jobs report is a little puzzling. The Federal Reserve originally said it would start tapering when unemployment fell… Read More

A strong gain after Friday’s jobs report failed to reverse four days of losses, and stocks were unable to deliver their ninth consecutive weekly gain. A Pullback Continues to be Likely After eight weeks of consecutive gains, SPDR S&P 500 ETF (NYSE: SPY) closed down 0.03% last week. The only up day was Friday, when SPY gained 1.12% after unemployment fell.#-ad_banner-#​ Traders’ reaction to the good jobs report is a little puzzling. The Federal Reserve originally said it would start tapering when unemployment fell to 7%, the level reached in the latest report. In addition to the drop in the headline number, the economy created more jobs than expected. A strong employment report could allow the Fed to begin tapering soon, and traders have sold on concerns about potential tapering in the past. The unemployment report is confirming a number of other data series that point to a stronger economy. Average hourly earnings increased and are now up 2.03% when compared to a year ago, higher than the rate of inflation. The number of people in the labor force also rose in November. The… Read More

After steadily returning an average of 18% a year for the past decade, gold is headed for its first annual loss since 2000. All told, gold prices have fallen over $450 an ounce since January — a 27% decline in just under 12 months.     In part, the gold market is suffering thanks to the economic recovery. Since gold is usually seen as a “safe haven” investment, an improving economy puts downward pressure on gold prices. Other headwinds include low inflation rates… surging equity values… and an overwhelmingly bearish sentiment facing commodities altogether. #-ad_banner-#Before I go any further though,… Read More

After steadily returning an average of 18% a year for the past decade, gold is headed for its first annual loss since 2000. All told, gold prices have fallen over $450 an ounce since January — a 27% decline in just under 12 months.     In part, the gold market is suffering thanks to the economic recovery. Since gold is usually seen as a “safe haven” investment, an improving economy puts downward pressure on gold prices. Other headwinds include low inflation rates… surging equity values… and an overwhelmingly bearish sentiment facing commodities altogether. #-ad_banner-#Before I go any further though, I want to note that it’s never a bad idea to devote at least a small portion of your portfolio to precious metals. Since these assets are generally insulated from rising price levels, metals like gold are a good way to hedge against inflation risk. But gold bullion is not the subject of today’s essay. Instead of touting the monetary benefits of the world’s oldest currency, I want to tell you about one of the most overlooked (and misunderstood) areas of the gold market…  I’m talking about gold stocks. “Gold stocks” is a financial synonym for gold mining companies —… Read More

Despite a bunch of new stats, trends and regulations circulating about the housing market, nothing points to its definitive direction in 2014.#-ad_banner-#​ That leaves prospective homebuyers, home sellers, loan candidates, banks, real estate agents and investors scratching their heads. Making matters more confusing is that even the experts can’t agree or seem to be analyzing the numbers differently. Perhaps a quick review the trends might help clarify the issues at hand. I’ll start with the good news, but a word of warning: The potential bad news that follows could be devastating — and the possibility of the 30-year-fixed… Read More

Despite a bunch of new stats, trends and regulations circulating about the housing market, nothing points to its definitive direction in 2014.#-ad_banner-#​ That leaves prospective homebuyers, home sellers, loan candidates, banks, real estate agents and investors scratching their heads. Making matters more confusing is that even the experts can’t agree or seem to be analyzing the numbers differently. Perhaps a quick review the trends might help clarify the issues at hand. I’ll start with the good news, but a word of warning: The potential bad news that follows could be devastating — and the possibility of the 30-year-fixed rate rising to 5% by the end of 2014 may be the least of your worries. So, without further ado, here’s some good news: A pair of U.S. agencies recently reported that October new-home sales rose 25% from the previous month. Market analyst Trulia says that November’s asking home prices rose 12.1% year over year, up in 98 of the 100 largest U.S. metro areas. And though Case-Shiller data for November won’t be released until Dec. 31, Zillow predicts it will reveal a 13.9% year-over-year increase for the month.  Perhaps the most comprehensive positive comments about 2014 came from Freddie… Read More

The appeal of clean energy stocks is evident. Billions of dollars are at stake as the world tries to wean itself off fossil fuels.#-ad_banner-# There can be little doubt that clean energy will account for at least 20% to 30% of our total energy picture a few decades from now. But the road is bound to be bumpy. The sudden plunge in solar stocks in 2011 and 2012 — not to mention their remarkable rebound this year — highlights just how risky these clean energy stocks can be. Indeed, many investors have concluded that they just can’t stomach that degree… Read More

The appeal of clean energy stocks is evident. Billions of dollars are at stake as the world tries to wean itself off fossil fuels.#-ad_banner-# There can be little doubt that clean energy will account for at least 20% to 30% of our total energy picture a few decades from now. But the road is bound to be bumpy. The sudden plunge in solar stocks in 2011 and 2012 — not to mention their remarkable rebound this year — highlights just how risky these clean energy stocks can be. Indeed, many investors have concluded that they just can’t stomach that degree of risk. But there is a better way: a focus on companies that already derive significant revenue streams in support of clean energy projects. These stable firms don’t own breakthrough technologies, but they are helping the industry pioneers to scale up their production. And in light of the long-term future for clean energy, these firms face robust growth potential. My favorite pick in this group: Spain’s Abengoa (Nasdaq: ABGB), which derives more than $10 billion in annual sales by helping construct clean energy power plants, water desalination systems, biofuel production facilities and highly efficient energy transmission networks. Abengoa’s Steady… Read More

I am a firm believer in using both technical analysis and fundamental research as stock picking tools. Many investors mistakenly specialize in one discipline or the other rather than a mixture of the two.  Market technicians are often guilty of reaching the conclusion that all the fundamental information is already inherent in the price of a security, therefore researching fundamentals is redundant. At the same time, hard-core fundamentalists believe that technical analysis only charts the past and thus cannot help with projecting the future. I have found both of these sentiments to be correct and to be wrong… Read More

I am a firm believer in using both technical analysis and fundamental research as stock picking tools. Many investors mistakenly specialize in one discipline or the other rather than a mixture of the two.  Market technicians are often guilty of reaching the conclusion that all the fundamental information is already inherent in the price of a security, therefore researching fundamentals is redundant. At the same time, hard-core fundamentalists believe that technical analysis only charts the past and thus cannot help with projecting the future. I have found both of these sentiments to be correct and to be wrong at the same time. All the fundamental information about a stock is inherent in its price. However, studying price alone will not increase your odds of making a winning trade. Knowing fundamentals while ignoring the technical picture may provide a reason for the stock movement, but does not confirm that price will move in any specific direction. Focusing solely on the technical picture will tell you what has happened and what may happen. But there are no guarantees or statistical tests that have uniformly proven much of traditional technical analysis works to provide an edge. So what’s an investor to… Read More

The recent stock market pullback has sparked a bearish fever in many traders.#-ad_banner-#​ All the major indices have slipped lower, prompting the bears to start their dance of doom. While in my view, the selling is clearly nothing but short-term profit taking and not a signal of anything ominous, it doesn’t prevent the bearish fearmongers from dominating the financial media with nebulous terms like “overextended” and “overvalued.” I love it when the stock market bears crawl out of their caves. The louder they get about an imminent market crash, the more confident I become that it’s not going… Read More

The recent stock market pullback has sparked a bearish fever in many traders.#-ad_banner-#​ All the major indices have slipped lower, prompting the bears to start their dance of doom. While in my view, the selling is clearly nothing but short-term profit taking and not a signal of anything ominous, it doesn’t prevent the bearish fearmongers from dominating the financial media with nebulous terms like “overextended” and “overvalued.” I love it when the stock market bears crawl out of their caves. The louder they get about an imminent market crash, the more confident I become that it’s not going to happen anytime soon. These bears cite the risk of recession, the end of the Federal Reserve’s quantitative easing measures, weak corporate earnings and even China’s slowdown as the potential catalysts that will send stocks into the next bear market. The funny thing is, the more bears there are, the lower the likelihood of a crash or sharp correction taking place. The opposite also holds true.  When everyone is super bullish, that’s when it’s time to expect a market correction. Even the bears have a name for this phenomenon: climbing the “wall of worry.” Stocks are said to be climbing… Read More

Every quarter, many of us in the investing world eagerly anticipate the SEC filings that the world’s largest (and greatest) investment managers are required to file. #-ad_banner-# There is no single 13F that is more eagerly anticipated than that of Berkshire Hathaway’s (NYSE: BRK-B) Warren Buffett. The Oracle of Omaha isn’t just one of the greatest stock pickers the world has ever seen. He is also one of the most selective. He seldom makes a significant new addition to his portfolio, usually instead preferring to add to existing positions or buy nothing at all. So when he makes a big… Read More

Every quarter, many of us in the investing world eagerly anticipate the SEC filings that the world’s largest (and greatest) investment managers are required to file. #-ad_banner-# There is no single 13F that is more eagerly anticipated than that of Berkshire Hathaway’s (NYSE: BRK-B) Warren Buffett. The Oracle of Omaha isn’t just one of the greatest stock pickers the world has ever seen. He is also one of the most selective. He seldom makes a significant new addition to his portfolio, usually instead preferring to add to existing positions or buy nothing at all. So when he makes a big purchase of a new stock, it’s kind of a big deal. In the most recent quarter, Buffett revealed a rare new portfolio addition: Exxon Mobil (NYSE: XOM) — for a cool $3.4 billion. Even for Buffett, that’s a big purchase. Investors have been scrambling to answer two questions: Why is Buffett was buying Exxon — and why now? Buffett has been familiar with Exxon for decades, so what’s changed about the company that merits a $3.4 billion investment from Berkshire? It certainly isn’t because Exxon’s stock price has dropped: Exxon’s shares are actually close to all-time highs, and… Read More